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Three Individuals Plead Guilty for Their Roles in a Houston Medicare Fraud Scheme Involving Claims of Hurricane Damage to Power Wheelchairs

WASHINGTON – Three individuals pleaded guilty today in connection with a Medicare fraud scheme operated out of a Houston-area durable medical equipment (DME) company, announced the Departments of Justice and Health and Human Services (HHS).

Melvin Jean Barnes, 60; Johnnie Lee Andrews, 58; and Monica Renee Perry, 42, pleaded guilty to conspiracy to commit health care fraud before U.S. District Court Judge Gray Miller in Houston. In their pleas, Andrews and Perry admitted that they were paid kickbacks in exchange for referring Medicare beneficiaries to the DME company, Luant & Odera Inc. Luant & Odera submitted false and fraudulent claims to Medicare for medically unnecessary DME, including power wheelchairs, wheelchair accessories and motorized scooters. In his plea, Barnes admitted that he was paid kickbacks in exchange for delivering the medically unnecessary DME.

After Hurricanes Katrina, Rita and Ike, Medicare relaxed its normal operating procedures to speed provision of healthcare services to elderly and disabled persons and created the CR Modifier. Under the CR Modifier, DME companies and other healthcare providers that furnished replacement DME in good faith, could be paid by Medicare for services provided, even if the companies could not comply with normal program requirements because of the hurricanes.

According to court documents, Andrews and Perry agreed to refer Medicare beneficiaries to Luant & Odera in exchange for kickbacks. Luant & Odera then used the beneficiaries’ information to bill Medicare under the CR Modifier for DME such as wheelchairs or scooters that were neither destroyed by a hurricane nor medically necessary. According to court documents, Barnes accepted kickbacks in exchange for delivering the DME for Luant & Odera. Andrews, Perry and Barnes admitted that they specifically knew that the DME was not destroyed in a hurricane and not medically necessary. Luant & Odera submitted approximately $3 million in false and fraudulent claims to Medicare using the CR Modifier for the DME.

At sentencing, scheduled for Dec. 16, 2010, the defendants face a maximum sentence of 10 years in prison.

In a related case, Helen Etifoh, the former owner of Luant & Odera, and Paula Whitfield, a patient recruiter for Luant & Odera, were both convicted by a federal jury April 16, 2010, of conspiracy to commit health care fraud. Whitfield was sentenced to 21 months in prison and ordered to pay $807,781 in restitution. Etinfoh is scheduled to be sentenced Dec. 10, 2010.

Today’s guilty pleas were announced by Assistant Attorney General of the Criminal Division Lanny A. Breuer; U.S. Attorney José Angel Moreno of the Southern District of Texas; Special Agent-in-Charge Richard C. Powers of the FBI’s Houston Field Office; Special Agent-in-Charge Mike Fields of the Dallas Regional Office of HHS Office of Inspector General (HHS-OIG), Office of Investigations; and the Texas Attorney General Greg Abbott.

This case is being prosecuted by Trial Attorneys Sam S. Sheldon, Charles Reed and Joseph S. Beemsterboer, with assistance from Assistant Chief John Neal of the Criminal Division’s Fraud Section. The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section.

Since their inception in March 2007, Medicare Fraud Strike Force operations in seven districts have obtained indictments of more than 810 individuals who collectively have falsely billed the Medicare program for more than $1.85 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.